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Wednesday, 24 June 2009

Contemporary globalisation has reached levels unseen since before 1914. Comment on the significance of this fact in the context of two of the....

James Rosenau (Reich, 1998) describes globalisation as it is not:“Globalisation is not the same as globalism, which points to aspirations for an end state of affairs wherein values are shared by or pertinent to all the world’s five billion people, their environment, their roles as citizens, consumers or producers with an interest in collective action designed to solve common problems. Nor is it universalism—values which embrace all humanity, hypothetically or actually.”

This when combined with the definitions of Higgot and Reich (Globalization and Sites of Conflict: Towards Definition and Taxonomy, 1998), and also Scholte (What Is Globalization? The Definitional Issue - Again", 2002) can give the following definition:Globalisation is a term of economy and purchase where by companies or in fact any organisation spreads the costs of production and resource procurement between different nations, territories, or even continents in order to maximise profit by taking advantage of the situation within those places.

Armed with a working definition of globalisation it is now necessary too examine the title question through the use of two sub questions. The first to be considered will be whether or not resource conflicts are on the increase; first examining what are resource conflicts, then considering those which have become wars, those wars which were not resources conflicts and finally conflicts which have not escalated to the level of war.

The second question is that of considering two aspects of capitalism, and their impact upon globalisation. The aspects selected for this evaluation are Free trade and Foreign Direct Investment (FDI) combined with Multi-National Corporations as a new ‘imperialism’. These are both of course cornerstones of globalisation, with free trade being the ‘best’ and ‘truest’ circumstances for the conducive conducting of globalised business model; whilst FDI is closely linked with the process of turning a company into a global force as it is only by investing in factories, workers and mineral rights within the poorer countries (directly investing or investing through intermediaries), the company can gain access.

Both questions will be concluded in their own sections before the conclusion of the whole work draws together the evidence from both to examine the significance of Contemporary globalisation attaining a levels financial fluidity and prevalence unseen since before the First World War.

Virtually all conflicts fit the definition of a resource conflict; i.e. a conflict over or because of economic reasons such as mineral exploitation, trade, fossil fuels, and of course the oldest form of resource conflict over living space or farm land and people to tax. The problem that sometimes arises with such conflicts though is that there are so many different forms as well as reasons for resource conflicts; is it a conflict to deny or restrict access to a particular resource, to gain access to or control over the resource, to displace and replace a resource (i.e. people); or is gaining these various levels of control over such resources as are part of the dispute subsidiary to another wider dispute (i.e. cultural, religious or political). These are all questions which have to be decided before the conflict can be confirmed as a resource conflict.

There are however some wars which are straightforward when it comes to assigning them as resource conflicts. For example World War I can be assigned as one such straightforward resource conflict. In World War I there was conflict over empire; all the European powers wished for ‘their place in the sun’ or rather access to the raw materials needed to fuel the factories and arsenals of Europe which were so important to the powers sense of themselves (Kaufman, Little, & Wohlforth, 2007; McDonald, 2004). For Britain there was another resource which it sought to defend, from what it saw as German aggression; control of the sea. Much as the modern US dollars predominance in economic transactions gives the united states power, British military and mercantile dominance of the world’s oceans were what secured it the empire, and its place in the world (Churchill, 2004; The Churchill Centre and Museum at the Cabinet War Rooms, London, 2009; Lavery, 2006; McDonald, 2004).

World War II is much the same with Germany instead of attempting to build an empire external to Europe, aiming to take through force of arms ‘Lebensraum’ from what they viewed as the ‘lesser’ peoples of Eastern Europe; Poland, Ukraine and Russia. For the Japanese it was again a story of the desire for more natural resources; something which had become more urgent after the American government had cut the supplies of the resource that has kept on giving, in terms of conflict, oil. Oil was arguably the root cause of the British and French involvement in the Suez Crisis 1956; it was the cause of the Iraqi invasion of Kuwait; and according to some the real reason for the American led invasion of Iraq in 2007.

The future cause of conflict though is more likely to be the one thing more precious than oil; fresh water for drinking, irrigating, and practically every other basic life requiring necessity. The African Great Lakes region (Adebajo, 2002; African Union, 2008) and the Middle East (Mendoza, 2007; Bregman, Israel's Wars, A History Since 1947, 2000) are just two areas where water is already causing conflict; the latter area building on the already inflamed tensions of the Arab-Israeli conflict (Bregman, A History of Israel, 2003). A conflict which up till recently was mainly based in culture, ideology, and history has added an even more important element; life. This is similar to the Falkland Islands conflict between Argentina and Britain, which started off with history (Clapp, Commodore Amphibious Warfare 1982, 2007; Thompson J. , 3 Commando Brigade in the Falklands, 2007) and has now added oil under the sea shelf to its potential victor’s prizes (Cronin, 2007).

Although of course the currently most famous resource conflict is the piracy of the coast of Somalia. This is where a very poor people are holding lots of very rich corporations, governments and international organisations to ransom in order to earn a living (Fellows, 2009; African Union, 2008; The Daily Telegraph, 2009).

The other major form of resource conflict is of course trade/tariff ‘wars’, such as the banana conflict when the EU was structuring its Tariff’s to favour former British and French Colonies (elsalvador.com, 2008); these in modern times are mostly decided by the World Trade Organisation. However, these themselves have escalated into full wars such as when Britain was in war time fight Napoleon’s armies, in peacetime fight the Napoleonic Continental system (Corbett, England in the Seven Years War, 2005, London/New York/Bombay/Calcutta: Longmans, Green, and Co 1907; Mahan, 1987, Boston: Little, Brown, and Company, 1890). With the increase in globalisation some say these forms of conflict are over; others point to the growing militancy of labour movements revolting against the loss of jobs to cheaper less regulated peoples.

In conclusion resources conflicts are changing, they are less physical now than they used to be more focused on diplomatic posture; but when they do get violent they go all the way to total war very quickly. They are on the increase; especially in areas such as South America, Africa and the Middle East, where a combination of scarcity of resources, widespread poverty and political regimes which have both a history animosity and history of rapidly occurring extreme changes of those in power makes them all extremely volatile. These situations are only compounded by external interference and the factionisation which often results; that not only will the number of conflicts increase but they will grow in nations and numbers that they encompass.

Free trade, the theoretical counter to the causes of resource conflict, unfortunately there is also the counter that Germany’s biggest market in 1940 was Russia; however that is also countered, after all, both of those nations at that time were dictatorships and therefore not subject to the normal rules and restrictions imposed by a capitalist market on a democratic nation.

Therefore perhaps we should say that Free Trade stops wars between democracies; well leaving aside what some would say was the natural tendency of politicians from democratic nations to want to rely on their own strengths of jaw, jaw, rather than they’re commander’s abilities at war, war, this can make sense. After all the greatest advantage when revving a nation or people up for conflict is misunderstanding, it is playing on the cultural stereotypes to fuel the fires of indignation and pride (McDonald, 2004). However, free trade boosts contact, boosting cultural exchanges, and the relationships which spring forth from such interaction; all these things make it harder for politicians to build the case for war (McDonald, 2004). This is one of the theories behind the European Union, the more interconnected and interdependent the economies, the people of its nations become the less likelihood of conflict. However, some would also point out that the conflict has just moved from the arsenal to the parliamentary chamber; and whilst this may be good from the ‘war’ point of view, it does not mean there are any less conflicts in fact there are probably more as they take on such personal perspectives.

It is promulgated that if the nations are trading rivals, then free trade will decrease the chance of conflict because it will move the emphasis to the individual corporations rather than making it a case of national pride (McDonald, 2004); after all when it does become a case of pride it can actually increase the chance of conflict.

Many economists will argue that Free trade is the truest form of Fair trade, as it is only under a situation of no tariffs in fact no trade barriers of any kind does the economic and mercantile world seem to be a fair and level playing field. This fairness if implemented would benefit all nations involved by allowing supreme access to limitless financial growth; although recent events would suggest that that is no longer more than an idealised possible. Unfortunately, this would not be the case as without tariffs to protect the manufacture of goods and the operation of services being carried out ex-national then a lot of nations would simple go bankrupt and their own industry would be bought wholesale by the really rich American, British or Chinese Multi National Corporations; or they might not even bother to buy out the local opposition, they may just decide to undercut to the point that all manufactured goods or Wheat (for example) is brought in from outside; due to the cost in comparison of producing their own.

Multi-National Corporations (MNCs) are the main vehicle for the transfer of work/production from one national address to another, the main vehicles for undermining local economies and the main vehicles for Foreign Direct Investment (FDI); or as some call it economic ‘imperialism’. It was argued prior to 2008 that the MNCs had lost their nationality; that they had become supra-national like the United Nations or European Union, and were now separate and powerful almost state-like organisations channelling the movement of capital (FDI) from one geographical area to another as it promised greater profit or greater influence and thus more power for a longer-term increase in profit.

However, with the recent banking crisis have caused many of this so called supra-national entities to suddenly become very national; for example HSBC ‘the worlds local Bank’ suddenly became ‘British’, General Motors became ‘American’ again (Abboud, 1009), in fact almost all major countries to a lesser or greater extent found themselves suddenly having to support these huge conglomerates which right up until before the crisis had been protesting their freedom, their power, their place in the world as being above/apart from nation states.

This has of course had a major impact on the flow of FDI; something which will have more of impact of the poorer nations whose economies had been reliant upon MNCs using them for the production part of the product process. In this case with the ‘re-naturalisation’ of the MNC’s governments are placing on them the requirements to build at home, to close factories abroad before they close factories at home; so as to protect their own economies (Abboud, 1009). As the economic crisis deepens the true extent of the FDI impact on nations economies is going to become very apparent; with countries Mexico going to need an increase in aid if it is going to carry on financing the Drugs War, without the part and unit production that has become so important to its economy.

Globalisation, free trade, these are both concepts which are supposed to reduce the chance of conflict by creating/fostering a ‘global world’ – this is not the same as globalism however. Globalisation is in its purest form when it is a Multi-National Corporation, moving parts all over the world, assembling, selling them again all over the world, minimising cost and maximising profit; removing the need for a conflict over resources as after all who needs to go to the costly business of sending arming when you can a send profit making entity to take control. The problem though is in the title; even with the huge levels of jealousy the empire period brought about; the fact was globalisation was present, and according to the title at a level which has not been seen again till the current era.

The significance of this should not be lost as whilst such trade and economic power is good it can build up unhappiness; with fresh water and oil both becoming such precious resources, how content are populations going to be if such resources are in the hands of foreign nations. This has previously been an argument countered by the fact that MNCs had apparently lost their ‘national identity’; something which the recent economic crisis has changed, perhaps irrevocably. This means that now foreign powers are controlling key resources, which are now key not only to national development, but thanks to Globalisation international development.